Xbox One will include a 500GB hard drive, Blu-ray player, built-in Wi-Fi and a Kinect sensor. It will cost £429 in the UK, $499 in the US and €499 in European markets. The console is available for preorder now.

Xbox One is a follow up to the company's Xbox 360 game console, which launched eight years ago. Microsoft showed off a new design for Xbox 360, which it bills as slimmer and quieter. It goes on sale immediately.

Microsoft Xbox One launch: Smart Glass takes charge

"With Smart Glass natively built into Xbox One, many of the actions you can take on your console can now be done directly from any Smart Glass device," said Marc Whitten, corporate vice president of Xbox LIVE at Microsoft, at the launch. He showed how gamers could see a timeline of their progress or set up and launch a multi player game from a tablet.

Microsoft announced a November 2013 launch for its Xbox One console in more than 20 markets around the world.